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What Is Customer Acquisition

Customer acquisition refers to gaining new consumers by persuading them to purchase a company's products and services. It involves identifying potential quality customers, qualifying leads, and establishing relationships to determine customer needs and how products meet those needs. The cost of customer acquisition is an important metric, as companies aim for their lifetime customer value to exceed acquisition costs. Successful acquisition strategies can help companies grow by obtaining the right customers cost-effectively.

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219 views4 pages

What Is Customer Acquisition

Customer acquisition refers to gaining new consumers by persuading them to purchase a company's products and services. It involves identifying potential quality customers, qualifying leads, and establishing relationships to determine customer needs and how products meet those needs. The cost of customer acquisition is an important metric, as companies aim for their lifetime customer value to exceed acquisition costs. Successful acquisition strategies can help companies grow by obtaining the right customers cost-effectively.

Uploaded by

sagar sadamastula
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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What Is Customer Acquisition?

A Definition of Customer Acquisition

Put simply, customer acquisition refers to gaining new consumers. Acquiring new
customers involves persuading consumers to purchase a company’s products and/or
services. Companies and organizations consider the cost of customer acquisition as an
important measure in evaluating how much value customers bring to their businesses.
Customer acquisition management refers to the set of methodologies and systems for
managing customer prospects and inquiries that are generated by a variety of
marketing techniques. Some successful customer acquisition strategies include
customer referrals, customer loyalty programs, and the like. One way to think about
customer acquisition management is to consider it the link between advertising and
customer relationship management, as it is the critical connection that facilitates the
acquisition of targeted customers in an effective way.

The Customer Acquisition Process

Customer acquisition requires forethought and strategies. In fact, there are many
different customer acquisition strategies that are used as part of the customer
acquisition process. Some customer acquisition methods are more effective with
specific types of clients, but there are a few basic steps that are included in any type of
customer acquisition plan.

The first step of any basic customer acquisition plan is to identify quality potential
customers. One customer acquisition strategy involves reaching out to potential
customers through call centers and mailing lists. These customer acquisition methods
allow companies to determine which individuals and businesses express interest in or
already use products similar to those of your company. Next, companies qualify the
leads a little further using various research methods to determine the viability of the
given lead. If the chances seem likely that you will be able to acquire this new
customer, his status is upgraded to that of prospect and assigned to a salesperson for
further interaction.

Many customer acquisition programs then include establishing a relationship with


prospects to identify their needs and determine how the products offered relate to
those needs. Salespeople also attempt to identify unstated needs; these are based on
data provided by ongoing conversations and interactions with the prospects.
Salespeople also can identify additional needs of prospects and offer additional
products so the prospects see a greater value from purchasing the products they
already are considering.

Customer Acquisition Cost

The last thing a company wants to do is spend more on acquiring customers than the
customers spend. The cost of customer acquisition (CAC) is the price companies pay
to acquire new customers. In its simplest form, the CAC is determined by dividing the
total costs associated with acquisition by total new customers, within a specific time
period. The cost of customer acquisition is an important metric for companies to
consider, along with the lifetime value of a customer. Companies and organizations
need to get a return on investment (ROI) from marketing and sales campaigns geared
toward customer acquisition. The goal is to achieve a high lifetime value (LTV) to
CAC ratio. A 3:1 LTV:CAC ratio is a perfect level.

Benefits of Customer Acquisition

Using appropriate customer acquisition strategies helps companies to grow, and


targeted customer acquisition programs help companies acquire the right customers in
a cost effective way. New companies or those with less established products
especially need to place a greater focus on customer acquisition. As companies
mature, they can shift their focus to customer retention. It’s important to keep in mind
that customer acquisition costs often are higher than customer retention costs and
therefore require a thorough analysis of the associated benefits. The acquisition
benefits also need to be fully quantified in order for companies to accurately gauge the
relative value of their customer acquisition process. For established companies to
grow most effectively, they should find ways to attract, satisfy, and retain customers.

Additional Reading

Looking for even more information on customer acquisition, check out these articles
and helpful resources:

 Customer Acquisition Strategies: It’s All in the DNA

 Acquisition and Beyond: Using Customer DNA to Gain and Keep Valuable
Customers

 Predicting Customer Behavior with Customer Conversation Modeling (CCM)


reference by

https://www.ngdata.com/what-is-customer-acquisition/

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